In order for the process to work seamlessly, an agreement between banks exchanging electronic check data needs to be in place. The banks involved must also exchange root certificates in order to trust the signatures of the check images.
The check image is scanned at the receiving bank to ensure that check is compliant. The image is signed using ECDSA.
The signed checks are then electronically sent to the settling banks. The settling bank takes each image and the signature, using the receiving bank’s certificate, to verify the digital signature on each check. Once verified, the settling bank then debits the appropriate accounts.
The paper check arrives later to serve as backup—or not at all. With Check 21, the paper check is not required past the point of capture of information for clearing and settlement.
Much like the digital postage mark process described in this newsletter, the crux of the electronic check presentment process is the verification of each digital signature on the thousands of checks that are processed.
Earlier issues of Code and Cipher have focused on the small key size of ECC and the direct relationship between key sizes and required computing resources. The underlying hard math problem behind ECC enables it to provide a higher security per bit over other public-key schemes. Given the volume of checks that must be signed, the smaller ECC key sizes provide for a greater efficiency and performance, while keeping the hardware requirements for check scanning to a reasonable level.
Since data must be maintained in archives for seven years, strong, efficient signatures are required. By signing the data using a strong ECC-based signature like ECDSA or ECPVS upfront, the information will remain secure for a longer period of time, until advances in computing power demand an even higher level of security.
The ANSI X9 standards (the definitive standards for financial institutions), specify ECDSA (Elliptic Curve Digital Signature Algorithm) for digital signatures in financial transactions. ECPVS (Elliptic Curve Pintsov Vanstone Signature) has been recently submitted and is pending approval.
Companies such as NCR have integrated ECC-based digital signatures in the scanning and signing technology they have developed for this new process.
Beyond check imaging and electronic check presentment, ECC also has other applications, not only in the financial industry, but also insurance, or national security. Many of the requirements for Electronic Check Presentment apply equally to document imaging and management in general. For the same reasons that ECC works well for the financial industry, it can also be used here.
For more information about Check 21, ECC and Electronic Check Presentment:
This issue of Code & Cipher reviews the first annual Certicom ECC Conference and summarizes some of the key discussions at the event.